Timing is important when buying an industrial stock. If you buy when business is booming you will likely pay too much, which means a very low yield. Most stocks in this sector are currently overpriced. The average yield on the Industrial Sector stocks that I follow is only 2.2%, with just six stocks yielding over 3%.
The industrials sector is one of the largest sectors in my dividend growth database. Of the 214 stocks that I track, it currently is represented by 37 stocks (17%). As noted above, this is not a sector I am in a position to buy often, but when the time is right, I plan on taking full advantage of the opportunity.
This week, I screened my dividend growth stocks database for industrials (as defined by Morningstar) with a yield above 2.5% and have increased their dividends for at least 30 consecutive years. The results are presented below:
3M Company (MMM)
Yield: 2.6% | Years of Dividend Growth: 53
3M Co. is a diversified global company that provides enhanced product functionality in electronics, health care, industrial, consumer, office, telecommunications, safety & security and other markets via coatings, sealants, adhesives, and other chemical. MMM has paid a dividend every year since 1916.
Illinois Tool Works Inc. (ITW)
Yield: 2.8% | Years of Dividend Growth: 48
Illinois Tool Works Inc. is a diversified manufacturer that operates a portfolio of 60 business units that serve the industrial and consumer markets globally. ITW has paid a dividend every year since 1933.
Automatic Data Processing Inc. (ADP)
Yield: 2.8% | Years of Dividend Growth: 36
Automatic Data Processing Inc. is one of the world's largest independent computing services companies, providing a broad range of data processing services. ADP has paid a dividend every year since 1974.
Genuine Parts Company (GPC)
Yield: 2.8% | Years of Dividend Growth: 55
Genuine Parts Co is a leading wholesale distributor of automotive replacement parts, industrial parts and supplies, and office products. GPC has paid a dividend every year since 1974.
Emerson Electric Co. (EMR)
Yield: 3.2% | Years of Dividend Growth: 56
Emerson Electric Co. designs and supplies product technology, and delivers engineering services and solutions to a wide range of industrial, commercial, and consumer markets around the world. EMR has paid a dividend every year since 1947.
Diebold, Inc. (DBD)
Yield: 3.5% | Years of Dividend Growth: 58
Diebold, Inc. provides ATMs and other self-service transaction systems and security products to the financial, commercial, government and retail markets. DBD has paid a dividend every year since 1954.
As with past screens, the data presented above is in its raw form. Some of the the companies would be disqualified for poor dividend fundamentals. However some of the others may be worth additional due diligence.
My database, D4L-Data, is an Open Office spreadsheet containing more than 20 columns of information on the 200+ companies that I track. The data is sortable and has built-in buttons and macros to make it easy to use. Companies included in the list are those that have had a history of dividend growth. The D4L-Data spreadsheet is a part of D4L-Premium Services and is updated each Saturday for subscribers.
Full Disclosure: Long EMR, ITW, MMM, ADP, GPC . See a list of all my income holdings here.
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